“I don’t think the demand is going to be there for
housing,” Adatia, who manages about C$6.4 billion ($6.2
billion) at Sun Life Global, a unit of Sun Life Financial Inc. (SLF)

The recent upswing in housing activity is being driven by
buyers rushing in as banks raise borrowing costs, Adatia said
said today at the Bloomberg Canadian fixed-income conference in
New York.

“I do think it’s a dead cat bounce,” he said.

Home sales surged in Canada’s two largest markets in
August. Sales rose 21 percent to 7,569 units in Toronto from a
year ago, according to the Toronto Real Estate Board, and
Vancouver existing home sales surged 53 percent, said that
city’s real estate board.

The average price of a home sold in Toronto was C$503,094
($487,636) in August, the Toronto realtors group said.

Home prices rose 2.3 percent in August from the year-ago
period, according to the Teranet-National Bank Composite House
Price Index released today. Toronto prices advanced 3.8 percent
from a year ago, while Vancouver housing prices fell 0.1 percent
in the month from last year.

The country’s housing market will probably experience a so-called “soft landing,” as the near-record household debt-to-income ratio continues to constrain construction, said Julien Reynaud, desk officer for Canada at the International Monetary
Fund.

Ideal Opportunity

Canada’s economy is slowing as its Group of Seven peers
show signs of improvement. Output growth eased to a 1.75 percent
pace in the second quarter while the U.S. expanded 2.5 percent.
The country’s jobless rate will exceed the U.S. next year for
the first time since 2008 as hiring slows and the Bank of Canada
will delay raising rates until the fourth quarter of next year,
according to a Bloomberg economist survey.

The slowdown presents the ideal opportunity for investors
to plan a Canadian portfolio and line up asset allocations for
when the economy picks up, said John Cerra, a portfolio manager
at TIAA-CREF, a New York-based financial services firm which has
$523 billion in assets.

The global economy is picking up already, he said. “We
have a situation now in 2013 where the U.S. economy is growing,
and rates are rising and our stock market’s rising, money is
coming back to the U.S. from many other markets,” Cerra said.
“Money is moving away from Canada because we don’t necessarily
need a safe harbor.”